OREANDA-NEWS. November 18, 2011. Please note that the numbers are calculated in accordance with Sberbank’s internal methodology

Income Statement Highlights for 10M 2011 (as compared to 10M 2010)

Net interest income grew 14.0% y-o-y

Net fee and commission income rose by 6.7% y-o-y

Operating income before total provisions increased by 11.5% y-o-y

Write-backs of total provisions amounted to RUB5.8 bn vs. provision charge of RUB164.9 bn for the same period a year ago

Operating income after total provisions increased 1.7-fold y-o-y

Operating expenses rose by 27.1% y-o-y

Profit before tax amounted to RUB337.8 bn vs. RUB160.0 bn for 10M 2010

Net profit totaled RUB276.4 bn vs. RUB126.2 bn for 10M 2010 

Operating income before total provisions increased by 11.5% y-o-y for 10M 2011.
Net interest income rose 14.0% y-o-y, which was mainly due to the increase in income from retail lending as the portfolio expanded, and the reduction in interest expenses on customer accounts and amounts due to other banks as the cost of funding fell.
Net fee and commission income was up by 6.7% y-o-y owing to increased volume of fee-generating operations, primarily operations with bank cards. Income from bank cards operations increased 1.5-times as a result of growth in the number of cards issued and volume of related transactions.

The recent months’ volatility on the stock and FX markets affected the 10M 2011 trading on financial markets results:

Income from securities (+RUB8.0 bn) halved compared to 10M 2010 results, caused by the decrease in securities prices;

Income from transactions with precious metals increased significantly (+RUB6.9 bn compared to -RUB0.5 bn for 10M 2010), attributed to the increase in volumes of client operations;

Expense from conversion operations amounted to -RUB3.2 bn (compared to -RUB0.5 bn for 10M 2010) primarily due to re-evaluation of balance accounts on FX changes.

Net gain from trading on financial markets for 10M 2011 amounted to +RUB11.7 bn.

The Bank wrote back RUB5.8 bn of total provisions for 10M 2011 vs. provision charge of RUB164.9 bn for 10M 2010. The m-o-m increase in the write-back is explained by provision releases against other assets, mainly FX swaps.

Operating expenses rose by 27.1% y-o-y, which was mainly due to higher staff costs on the planned increases in salaries as well as costs incurred in relation to the Bank’s continuing implementation of its strategy and business development. Furthermore, business growth is accompanied with increases in amortization, taxes, and mandatory fee payments to the state-deposit insurance system.

Profit before tax totaled RUB337.8 bn for 10M 2011 and net profit was RUB276.4 bn. Both figures were more than double the amounts for 10M 2010 and made historical record highs.

The Bank’s assets increased by nearly a trillion or 11.4% year-to-date and exceeded RUB9.5 trn for 10M 2011. In October assets grew by RUB148 bn or 1.6%, mainly from loan portfolio expansion:

The Bank lent Russian corporate clients approx. RUB600 bn in October or more than RUB4.1 trn year-to-date. As of November 1, 2011, the balance of corporate loan portfolio amounted to RUB5,704 bn, up 19.7% for 10M 2011.

The Bank issued over RUB110 bn of retail loans in October and over RUB900 bn for 10M 2011. The retail loan portfolio increased by 24.1% year-to-date to RUB1,615 bn as of November 1, 2011.

The quality of the loan portfolio continued to improve: the overdue loans as a percentage of the total book decreased to 4.01% from 5.04% in the beginning of the year and 4.16% as of October 1, 2011. The coverage ratio remained strong with loan-loss provisions at RUB639 bn or 2.18 times the overdue loans as of November 1, 2011.

Investment portfolio contracted by RUB13.2 bn in October to RUB1,462 bn. There was a significant reduction in the corporate bonds portfolio due to maturity of two issues of a large Russian client. The share of government bonds remained stable at 53% and that of corporate bonds - at 31%.

Retail accounts and deposits remained merely unchanged at RUB5,203 bn increasing 8.2% year-to-date. Corporate accounts and deposits lost RUB115 bn in October to RUB1,855 bn led by closing of term deposits.

Regulatory capital (under CBR regulation No. 215-P) rose by RUB23.0 bn in October to RUB1,488 bn on net profit increase. The regulatory capital increased by 19.8% year-to-date.

Capital adequacy ratio remained at 17% as of November 1, 2011.